loras college 2014 business analytics symposium | margie flynn: measuring sustainability
DESCRIPTION
Through this presentation, Margie Flynn will walk you through measuring sustainability (trends in sustainability data, ratings and frameworks) and sustainability reporting benefits, global reporting initiative and best practices. For more information on the Loras College 2014 Business Analytics Symposium, the Loras College MBA in Business Analytics or the Loras College Business Analytics Certificate visit www.loras.edu/mba or www.loras.edu/bigdata.TRANSCRIPT
Measuring Sustainability
Margie Flynn
BrownFlynn
BrownFlynn At A Glance
• Award-winning corporate responsibility and sustainability consulting firm founded in January 1996
• 100% of our business is derived from sustainability consulting, communications and training services
• First U.S.-certified Global Reporting Initiative training organization and a GRI Organizational
Stakeholder
• Since 2006, we have advised clients on the GRI process, producing GRI-based reports
and utilizing the framework as a robust management tool
• A Silver Consultancy Partner for the Carbon Disclosure Project (CDP)
• Founding member of U.S. Business Council for Sustainable Development
• Extensive experience in guiding regional, national and global clients on their sustainability journeys
• A women-owned company (W/FBE) and a DBE (Disadvantaged Business Enterprise)
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Your Partner, Our Services
BrownFlynn is a corporate responsibility and sustainability consulting firm advising companies on:
• Integrating responsible practices into their business strategies
• Communicating these practices internally and externally for bottom-line impact
• Training to build skills and engage associates
CONSULTING
Sustainability and Corporate Responsibility Advisors
COMMUNICATIONS TRAINING
We advise you on your journey
We help you communicate your successes
We train you/your team along the journey
• Sustainability Strategy
• Goal Setting
• Materiality
• Stakeholder Engagement
• Research and Analysis
• Facilitation
• Stakeholder Communications
• Branding
• Sustainability Reporting
• Community Outreach
• CDP, DJSI and WDP Responses
• Executive Sessions
• Customized Employee Sessions
• Open Enrollment Classes
• Webinars
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Agenda
• Measuring Sustainability
– Trends: Sustainability Data, Ratings, Frameworks
• Sustainability Reporting
– Benefits
– Global Reporting Initiative
– Best Practices
• Q&A
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Measure What Matters
“You can’t manage what you can’t measure.”
– Peter Drucker, Management Consultant, Educator and Author
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Ethical Business & Sustainability
Reporting
• 76% of the 2012 World’s Most Ethical Companies write sustainability reports, of
which 90% use the GRI framework.
Sources: Ethisphere Website, G&A Institute Research 2012
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Proliferation of Sustainability Data
• The evolution of Big Data technology is enabling the proliferation and dissemination
of sustainability data.
• As a result, stakeholders are expecting companies to be more transparent about their
measurement and management of environmental, social and governance (ESG)
performance.
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Explosive Growth of Ratings,
Rankings & Indices
21
108
182
0
50
100
150
200
2000* 2010* 2014**
Number of Ratings, Rankings and Indices
*According to Research by Sustainability, “Rate the Raters” 2010
**Lastest count according to research of CSRHub resouces by BrownFlynn
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Sustainability Reporting Frameworks
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What is IR?
• The International Integrated Reporting Council (IIRC): – Global coalition of regulators, investors, companies, standard setters,
the accounting profession and NGOs
– Views that communication about businesses' value creation should be the next step in the evolution of corporate reporting
– Over 100 business in the IIRC Pilot Programme Business Network
• The IR Framework – Released in December 2013
– Voluntary standards, adopting integrated thinking for cohesive and efficient reporting
– Trialed in over 25 countries
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Stock Exchanges Support
Sustainability Reporting
Mandatory Non-Financial Disclosure Recommended Non-Financial Disclosure
Johannesburg Stock Exchange Brazilian Stock Exchange
Sweden Singapore Stock Exchange
Denmark Shanghai Stock Exchange
Malaysia (Burse Malaysia) European Commission
Argentina (Buenos Aires) France
London Stock Exchange (2013) NASDAQ
Securities and Exchange Board of India NYSE Euronext
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What is CDP?
• CDP is a nonprofit that works to transform the way the world does business
to prevent dangerous climate change and protect natural resources
• Annual questionnaire was launched in 2000 to promote disclosure as an
investment tool and agent of sustainable improvement
• CDP now covers:
– Climate Change
– Water
– Supply Chain
– Forest
– Cities
– Carbon Action
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Growth of CDP Responses
• As of 2013, 5000+ organizations (81% of the Global 500; 70% of the S&P
500) in 72 countries measure and disclose their emissions and climate
change strategies.
Source: CDP
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CDP Investor Members
• CDP has 722 institutional investors representing $87 trillion in assets.
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Global Reporting Initiative (GRI)
The Institution The Process
The Framework The Report
Global Reporting Initiative (GRI)
a non-profit,
multi-stakeholder
resource
a framework for
improving the quality of
sustainability disclosures
a sustainability
management
process
a set of basic disclosure
requirements for a
sustainability report
History of GRI Video
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GRI Report Content Principles
The report should cover Aspects that reflect the organization’s significant economic,
environmental and social impacts; or substantively influence the assessments and
decisions of stakeholders.
The organization should identify its stakeholders, and explain how it has responded to
their reasonable expectations and interests.
The report should present the organization’s performance in the wider context of
sustainability.
The report should include coverage of material Aspects and their Boundaries,
sufficient to reflect significant economic, environmental and social impacts, and
to enable stakeholders to assess the organization’s performance in the reporting
period.
Materiality
Stakeholder
Inclusiveness
Sustainability
Context
Completeness
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GRI Report Quality Principles
The report should reflect positive and negative aspects of the organization’s performance
to enable a reasoned assessment of overall performance.
Select, compile and report information consistently. Information should be presented in a
manner that enables stakeholders to analyze changes in the organization’s performance
over time, and compare to other organizations.
The reported information should be sufficiently accurate and detailed for stakeholders to
assess the organization’s performance.
Report on a regular schedule so that information is available in time for stakeholders to
make informed decisions.
The organization should make information available in a manner that is understandable and
accessible to stakeholders using the report.
The organization should gather, record, compile, analyze and disclose information and
processes used in the preparation of a report in a way that they can be subject to
examination and that establishes the quality and materiality of the information.
Balance
Comparability
Accuracy
Timeliness
Clarity
Reliability
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GRI Aspects Environmental Labor Practices
& Decent Work
Human Rights
• Materials • Energy • Water • Biodiversity • Emissions • Effluents and Waste • Products and Services • Compliance • Transport • Overall • Supplier Environmental Assessment • Environmental Grievance
Mechanisms
• Investment • Non-discrimination • Freedom of Association & Collective
Bargaining • Child Labor • Forced /Compulsory Labor • Security Practices • Indigenous Rights • Assessment • Supplier Human Rights Assessment • Human Rights Grievance Mechanisms
• Training and Education • Employment • Labor/Management Relations • Occupational Health & Safety • Diversity & Equal Opportunity • Equal Remuneration for Men and Women • Supplier Assessment for Labor Practices • Labor Practices Grievance Mechanisms
Product Responsibility Society Economic
• Economic Performance • Market Presence • Indirect Economic Impacts • Procurement Practices
• Local Communities • Anti-Corruption • Public Policy • Anti-competitive Behavior • Compliance • Supplier Assessment for Impacts on Society • Grievance Mechanisms for Impacts on
Society
• Customer Health & Safety • Product & Service Labeling • Marketing Communications • Customer Privacy • Compliance
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Who is Using GRI?
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How does CDP complement the GRI
process?
• CDP Content:
– CDP questions correspond to disclosure topics
within the GRI framework
– Opportunity to re-purpose outcomes from CDP
for Sustainability Report and vice versa
• GRI Report Development Outcomes:
– Information from interviews (risks,
opportunities, projects)
– Content and positioning can be leveraged
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Why Report Sustainability
Information? • G250 companies view reputation and ethical
considerations as key reasons to report
sustainability efforts.
0% 20% 40% 60% 80%
Cost Savings
Improved Relationships w/ Government…
Strengthened Supplier Relationships
Market Position Improvement
Access to Capital or Increased Shareholder…
Economic Considerations
Risk Management
Employee Motivation
Innovation and Learning
Ethical Considerations
Reputation or Brand
Source: KPMG International Corporate Responsibility
Reporting Survey, 2011
• Sustainability reporting improves CEO
approval ratings and employee satisfaction.
Companies with GRI-based reports have the
highest CEO approval and employee
satisfaction ratings.
67.0068.0069.0070.0071.0072.0073.0074.0075.00
CEO Approval Rating Percentage
(as of July 2012)
Source: Glassdoor, G&A Research, 2012
3.00
3.05
3.10
3.15
3.20
3.25
3.30
Employee Satisfaction Scale - 0 to 5
(as of July 2012)
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Supply Chain Pressure for
Reporting • Companies are shifting their supply chain engagements from authoritative to
collaborative.
Authoritative Approach
Companies demand suppliers to provide information through
surveys, questionnaires or scorecards.
Demonstrative Approach
Companies ask suppliers to
use reporting frameworks they are already using.
Collaborative Approach
Companies work with and
educate suppliers on how they want to report information.
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Supply Chain Collaboration
Through Reporting • Companies who produce sustainability reports see an increase in supply chain
member collaboration
Source: MIT and BCC, 2012.
Global executive study and
research project.
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GRI: The Leading Sustainability
Reporting Framework
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The 2013 CRO Top 100
Johnson Controls Campbell Soup
IBM Bristol-Myers Squibb
Mattel 3M
Kimberly-Clark Hewlett-Packard
Nike Gap
General Mills Intel
Coca-Cola co. Coca-Cola Enterprises Inc.
Pinnacle West Capital Albemarle
Spectra Energy E.I. DuPont De Nemours & Co
Johnson & Johnson Abbott Laboratories
PG&E Microsoft Corporation
Freeport-McMoran Copper&Gold Pepsico Raytheon
Advanced Micro Devices
Texas Instruments Accenture
H.J. Heinz Co. EMC
Hormel Foods Jones Lang LaSalle
Eaton Merck & Co. Altria Group
Chevron Cisco Systems
Occidental Petroleum Starbucks
Colgate-Palmolive Target Hess
Ball Corp. Green Mountain Coffee
Clorox Dell Inc.
Yum! Brands Motorola
Hershey Company Exelon Corp
PPG Industries
McGraw-Hill UPS
Baxter International Inc. JPMorgan Chase & Co.
Northern Trust Corp Verizon
Communications Xerox Corp Walt Disney
Dow Chemical Lexmark International
FedEx Oracle Ford
State Street Life Technologies
Mosaic Carnival Corp. Sprint Nextel
Wisconsin Energy Corp. Darden Restaurants
Wyndham Worldwide Rockwell Automation
CA Technologies Southwest Airlines
ConocoPhillips
International Paper Entergy Corp Weyerhaeuser
Boeing Sempra Energy
Dominion Resources Whirlpool
AT&T Eli Lily & Co.
General Electric Co. TJX Companies Duke Energy
Agilent Technologies Hasbro
Lockheed Martin. Northeast Utilities
Prudential Financial Air Products &
Chemicals Exxon
Praxair, Inc. Marathon
Monsanto Co. PVH Corp.
Allergan Inc.
88%
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Reporting as a Management Tool
1. Discovery
• Project Launch Meeting
• Background (internal)
• Benchmarking (external)
2. Strategy and
Prioritization
• Value Chain Mapping
• Stakeholder Engagement
• Leadership Team
Materiality Workshop
3. Define Content
• Content Outline
and Site Map
• Theme Development
• Design
• Gather Additional
Data and Stories 4. Develop Content
• Write Copy and
Manage Edits
• Continue Design
• Define Assets
5. Production
• Development
• Content Pouring
• PDF and Summary Layout
• Testing and QA
• Proofing
• Launch Planning
6. Launch
• Launch
• Measure
• Optimize
BrownFlynn’s Approach
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Sustainability Report Best Practices
Examples
• Allstate’s Interactive Materiality Matrix
• American Electric Power’s Stakeholder
Engagement:
– Send an e-card to family and friends
to remind them to use energy wisely
– Subscribe to AEP e-mail alerts and
contact AEP
– Measure carbon footprint
• Campbell’s Soup Data Accessibility
– Download data, entire CSR report, individual
sections, or previous reports
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Award-Winning Sustainability
Reports
• 2011/2010 Best Report: Coca-Cola Enterprises Inc
• 2011/2010 Best 1st Time Report: La Trobe University
• 2011/2010 Best SME Report: Beyond Business
• 2011/2010 Best Integrated Report: Novo Nordisk A/S
• 2011 Relevance and Materiality: Marks and Spencer plc
• 2011 Openness and Honest: Marks and Spencer plc
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Measure What Matters
“In God we trust, all others
must bring data.”
– W. Edwards Deming, Statistician
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Thank You for Attending!
Margie Flynn
Principal and Co-Founder
440-484-0100, x3
For more information on BrownFlynn’s services,
please visit www.brownflynn.com
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Q & A
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Measuring Sustainability: APPENDIX
Margie Flynn
BrownFlynn
What is SASB?
• The Sustainability Accounting Standards Board (SASB) is a nonprofit organization that establishes industry-based sustainability standards for the recognition and disclosure of material environmental, social and governance impacts by companies traded on U.S. exchanges.
• Sectors include health care, financials, technology & communication, non-renewable resources, transportation, services, resource transformation, consumption, renewable resources & alternative energy, and infrastructure.
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Ford Connects Big Data with
Environmental Impacts
• “Analytics permeates almost every aspect of sustainability at Ford, helping to chart paths to a cleaner, brighter, better world and a stronger business.”
• “The amount of available data is growing fast: Ford researchers have begun experimenting with vehicles that produce 250 gigabytes of data an hour. More information leads to further improvements in increasing fuel economy and reducing vehicle emissions.”
• “Ford considers big data and analytics the next frontier for innovation, competition and productivity, with new opportunities emerging such as green routing, that allows consumers to optimize driving routes to minimize their impact on local air quality” – Read the full press release here: Ford Embracing Analytics and Big
Data to Inform Eco-Conscious Decisions, Stay Green
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Big Data Inform Solutions
“You can have data without information, but you cannot have information without data.”
– Daniel Keys Moran, Technologist
Data is a “raw material ready to be shaped.” – Tate Cantrell, CTO of Verne Global
“Organizations are cultivating ‘big data’ towards sustainable solutions across industries and sectors.”
– Elaine Hsieh, Program Director & Senior Analyst, Verge
Source: VERGE
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